The company had a dismal Q2, where its operations were affected largely by the change in the management and ownership. And looking at the Q3CY11 performance, it seems most of the integration pain has been absorbed. The results were better than expected with the company posting a net profit of Rs.90 crore v/s a net loss of Rs.51 crore in current Q2. Total income grew by just 2% . To a large extent, net profit was helped due to 16% decline in personnel costs at Rs.519 crore. The company laid off a few employees post its iGate acquisition; with the total employee strength now at 17,853, which is 519 employees lesser than Q2. Forex gain of Rs.36.39 crore also helped. Revenue realization in Q2 was at Rs.44.72/us$ and in Q3 it was at Rs.49.50/us$ which in itself was a huge advantage.
Looking ahead, the company will end 2011 with all the integration pain behind it and though YoY performance at the end of the year might seem under pressure, it is good to know that it is entering 2012 with a clean slate, a new management, fully integrated. iGate Corporation acquired a 82.4 per cent stake in Patni Computers in May 2011. During the quarter, the company generated cash flow of Rs.11.64 crorefrom operating activities and net cash flow was placed at Rs.213.26 crore. Q4 could be better and in 2012, the new management is sure to infuse more vigour into the company. The real spike up in the stock will come once the company announces delisitng, which seems like a certainty. This could happen over the next 6 to 12 months and those with the holding capacity can buy into the stock on not just delisitng expectations but also on strong earning outlook.
Source: Internet (By S P Tulsian)
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